y
which surprised the most sanguine observers. The principal feature of
the successive Egyptian budgets of 1890-1894 was the fiscal relief
afforded to the population. From 1894 onward more attention was paid
than had hitherto been possible to the legitimate demands of the
spending departments and to the prosecution of public works. Of these
the most notable was the construction (1898-1902) of the Assuan dam,
which by bringing more land under cultivation permanently increased the
resources of the country and widened the area of taxation.

Reserve funds.

With the accumulating proofs of the financial stability of the country
various changes were made in connexion with the debt charges. With the
consent of the powers a General Reserve Fund was created by decree of
the 12th of July 1888, into which was paid the Caisse's half-share in
the eventual surplus of revenue. This fund, primarily intended as a
security for the bondholders, might be drawn upon for extraordinary
expenditure with the consent of the commissioners of the Caisse. Large
sums were so advanced for the purposes of drainage and irrigation and
other public works, and in relief of taxation. The defect of this
arrangement consisted in the necessity of obtaining the consent of the
commissioners--a consent sometimes withheld on purely political grounds.
At the same time it is believed that but for the faculty given by the
decree of 1888 to spend the General Reserve Fund on public works, the
financial system elaborated by the London Convention would have broken
down altogether. Between 1888 and 1904 about L10,000,000 was devoted
from this fund to public works.

In June 1890 the assent of the powers was obtained to the conversion of
the Preference (Privileged), Domains and Daira loans on the following
conditions, imposed at the initiative of the French government:--

1. The employment of the economies resulting from the conversion was
to be the subject of future agreement with the powers.

2. The Daira loan was to be reimbursed at 85%, instead of 80%, as
provided by the Law of Liquidation.

3. The sales of Domains and Daira lands were to be restricted to
LE.300,000 a year each, thus prolonging the period of liquidation of
those estates.

The interest on the Preference stock was reduced from 5 to 3-1/2%, and on
the Domains from 5 to 4-1/4%. As regards the Daira loan, there was no
apparent reduction in the rate of interest, which remained at 4%